Question

Stahl Consulting started the year with total assets of $20,000 and total liabilities of $5,000. During the year, the business recorded $16,000 in catering revenues and $10,000 in expenses. Stahl issued stock of $3,000 during the year. Stockholders' equity changed by what amount from the beginning of the year to the end of the year?

Answer 1

Answer:

Stockholders' equity changed by $9,000 from the beginning of the year to the end of the year.

Explanation:

Stockholders Equity at beginning of the year = Total Asset - Total Liabilities

Stockholders Equity at beginning of the year = $20,000 - $5,000

Stockholders Equity at beginning of the year = $15,000

Stockholders Equity at Ending of the year = Stockholders Equity at beginning of the year + Revenue for the year - Expenses for the year + New stock issuance

Stockholders Equity at Ending of the year = $15,000 + $16,000 - $10,000 + $3,000

Stockholders Equity at Ending of the year = $24,000

Change in Equity = $24,000 - $15,000 = $9,000